If you’re like most people, then the majority of your thinking around your finances might on the idea of building financial growth and opening up new pathways through that. There’s nothing wrong with wanting more money to fulfill your goals. But stability is crucial, too. You want to ensure that your financial situation isn’t going to jump from good to terrible because of a few knocks. For that, you’re going to need to build a suit of financial armor.

Know how much you need to stay afloat no matter what

The first and most obvious answer is to squirrel away some cash that you can rely on when you really need it. This is the emergency fund and it’s vital to start building it as soon as you can. You want it to grow to be around at least as much as three months’ worth of your salary. That way even if you lose your job, you know you have the money you can stretch to keep yourself in good condition while you remedy the issue.

What insurance you really need

There are a lot of different kinds of insurance, and not all of them are needed. They’re sold on fear of scenarios that truly are unlikely. Flight insurance, for instance, is very rarely needed if you already have life insurance. Do an audit of insurance policies you are on or take regularly and cut the ones that you don’t need. Instead, put that money into things like income protection insurance which you really could need.

Know your rights

It’s important to know when you shouldn’t have to pay, as well. For instance, if you’re involved in a road accident or personal injury, then you should know when you’re not the person who has to pay. Advisors like David & Philpot, P.L. can be helpful in assigning responsibility correctly in such situations. A lot of cases of sudden debt are caused by the financial impact of such accidents. Knowing when you shouldn’t be the one paying can protect you from that risk.

Diversify that income

Your job is going to be the main source of your income for a great deal of your life, most likely. But it shouldn’t be the only one. You should have other ways of making money even if you can’t make it through your job. For instance, you should start learning to invest and build a portfolio that keeps you making money without doing all that much.

Be ready and able to borrow

If you’re at risk of falling into debt, then buying yourself some breathing room by borrowing can be a viable option. However, if your credit score is bad, then the only loans available to you might only buy you a short period of time and drastically increase the overall amount you have to pay. Look after your credit score and make sure you get the best deals for borrowing when you really need to.

Financially smart people don’t just get money. They protect it. Otherwise, all their hard work can be undone by a case of really bad luck. Don’t let that happen to you.